Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market.
The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.
But critics worry that the banks gained enough flexibility under the plan that it hews too closely to the “pre-crisis status.”
“The rule is really on the edge of returning to the old, opaque way of doing business,” said Marcus Stanley, the policy director of Americans for Financial Reform, a group that supports new rules for Wall Street.
The Dodd-Frank Act now exists in name only, as it's basic tenets have been gutted. This is just another, if not the last, brick in the wall for what the bill stood for originally. This article was posted on The New York Times website late on Wednesday afternoon...and I thank reader Clive Sutherland for today's first story.
By the Federal Reserve's own logic about breaking up banks that are too big to fail, it's time to break the Fed apart for the same reasons, according to a blistering analysis by Alex Pollock of the American Enterprise Institute.
Pollock, in a note to American Banker, said St. Louis Fed President Jim Bullard recently laid out four simple ways to determine when a bank is too big and needs to be split up — namely, if its assets are too voluminous, if it's too leveraged, if it has too much short-term funding of longer term assets and if it creates too much systemic risk.
Pollock said the Fed's current operating status could be accurately characterized by the following: It's too big, with over $3.3 trillion in assets, it's too leveraged at 60 to 1, it's extremely short-funded and it's "a frequent contributor through its interest rate and money-printing action of gigantic systemic risk."
"Therefore, it follows pretty clearly from the same logic that we should break up the Fed," said Pollock, former CEO of the Federal Home Loan Bank of Chicago.
All in favour say aye! This story was posted on the moneynews.com Internet site during the East Coast lunch hour yesterday...and it's courtesy of Elliot Simon.
Central banks, including the Bank of England, strayed into “unchartered waters” by cutting interest rates to near-zero and launching billions of pounds of quantitative easing, and they will find the exit “difficult to control”, the IMF said. “The market response [to a rise in interest rates] will be less predictable ... possibly for several months or even years.”
Long-term interest rates could spike as investors dump over-priced bonds and banks could face a fresh round of losses on both their gilt portfolios and loan books as borrowers struggle to meet higher monthly payments, it added.
For the economy more broadly, though, the IMF said the risks were considerable. “The risk is interest rate volatility and overshooting in the adjustment of long-term rates. The potential sharp rise in long-term interest rates could prove difficult to control, and might undermine the recovery (including through effects on financial stability and investment),” it wrote in a policy paper.
It also argued that there was clear evidence of “diminishing returns” in continuing with existing policies like QE. The most effective policy now, it suggested, was “conditional guidance” of the sort used by the US Federal Reserve and under review by the Bank. It has also been championed by incoming Governor Mark Carney.
This news item appeared on the telegraph.co.uk Internet site at 4:00 p.m. BST yesterday...and it's Roy Stephens' first offering in today's column.
First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities , toilet paper.
Blaming political opponents for the shortfall, as it does for other shortages, the embattled socialist government says it will import 50 million rolls to boost supplies.
That was little comfort to consumers struggling to find toilet paper on Wednesday.
"This is the last straw," said Manuel Fagundes, a shopper hunting for tissue in downtown Caracas. "I'm 71 years old and this is the first time I've seen this."
This AP story showed up on the philly.com Internet site yesterday...and I thank Phil Barlett for bringing us the first story of any real importance in today's column.... )
Perhaps for the first time in his political career, Nigel Farage, the scourge of British politics, found himself in retreat on Thursday evening as dozens of protesters hounded him out of central Edinburgh.
The Ukip leader was finally whisked away in a police riot van under a tirade of abuse from a crowd of about 50 young demonstrators – students, anti-racist campaigners and activists in the radical left pro-Scottish independence movement – after being forced to retreat not once, twice or three times, but four times.
Farage was first forced out of the Canon's Gait pub on the Royal Mile after the landlord took fright as the demonstrators disrupted his casual press conference with shouts of "racist", "scum" and "homophobe". Out on the street, as the fingers pointed and taunts escalated, he was rejected by one taxi and turfed out of a second.
This story appeared on the guardian.co.uk Internet site early yesterday evening BST...and I thank reader Bob Visser for sending it along.
The Telegraph has been accused by Spanish newspapers of launching a "brutal attack", succumbing to "Hispanophobia", leading an Anglo-Saxon assault, and otherwise trying to divert attention away from Britain's own lamentable condition. Spanish readers might be comforted to know that we are even more brutal with our own leaders.
Since I was in Madrid last week as a guest of the Spanish government, let me add my half-penny to the debate. Spain has already done all that can reasonably be expected of any nation, enduring its "calvario" with dignity and fortitude. It has slashed internal consumption by 16 percentage points of GDP without triggering a social explosion - "no mean feat", said one minister.
Whether the country proves to be solvent or insolvent by mid-decade depends almost entirely on the future actions of the European Central Bank and the northern creditor powers. Nothing is pre-determined.
Ambrose Evans-Pritchard is on the defence here...and the article from yesterday's edition of The Telegraph falls into the must read category. I thank Roy Stephens for his second offering in today's column.
The European common currency zone has now been in recession for six straight quarters, with three of the bloc's four largest economies now suffering persistent negative growth. Could the Continent's pursuit of austerity be backfiring? German commentators believe the answer is yes.
The European Union statistics office on Wednesday noted that nine of 17 euro-zone member states are now in recession, with France being the newest significant member of that club. Furthermore, the common currency zone, with bloc-wide declines in economic output for six straight quarters, is now struggling through its longest recession ever, worse even than the downturn in the immediate wake of the 2008 financial crisis.
The contraction was not huge; the euro-zone economy shrank by just 0.2 percent in the first three months of this year. And the German economy narrowly avoided recession, posting growth of 0.1 percent. But the situation in large economies such as Italy and Spain, both of which saw contractions of 0.5 percent in the first quarter of this year, is worrisome.
The currency area's persistent stagnation has raised concerns that Europe could be facing a "lost decade" like the one Japan recently lived through. Klaas Knot, head of the Dutch central bank and member of the European Central Bank board, is just one of many significant voices sounding the warning.
This article appeared on the German website spiegel.de early yesterday afternoon Europe time...and once again I thank Roy Stephens for bringing it to our attention.
In a clear warning to Syria to stop the transfer of advanced weapons to Islamic militants in the region, a senior Israeli official signaled on Wednesday that Israel was considering additional military strikes to prevent that from happening and that the Syrian president, Bashar al-Assad, would face crippling consequences if he retaliated.
“Israel is determined to continue to prevent the transfer of advanced weapons to Hezbollah,” the Israeli official said. “The transfer of such weapons to Hezbollah will destabilize and endanger the entire region.”
“If Syrian President Assad reacts by attacking Israel, or tries to strike Israel through his terrorist proxies,” the official said, “he will risk forfeiting his regime, for Israel will retaliate.”
This news item was posted on The New York Times website on Wednesday sometime...and I thank Marshall Angeles for bringing it to my attention...and now to yours.
Warships from Russia’s Pacific Fleet have entered the Mediterranean for the first time in decades. Russia’s Navy Chief says the task force may be reinforced with nuclear submarines, as the country starts building up a permanent fleet in the region.
“The task force has successfully passed through the Suez Channel and entered the Mediterranean. It is the first time in decades that Pacific Fleet warships enter this region,” the Pacific Fleet spokesman, Capt. First Rank Roman Martov told RIA.
The vessels are now heading to Cyprus and will make a port call in the city of Limassol, he added.
The group includes destroyer “Admiral Panteleyev,” two amphibious warfare ships “Peresvet” and “Admiral Nevelskoi,” as well as a tanker and a tugboat.
This article was posted on the Russia Today website early yesterday evening Moscow time...and it's another story from Roy Stephens.
China has limited room to use government spending and policy stimulus to boost its economy, China Premier Li Keqiang was quoted as saying on Wednesday, dashing hopes among some investors that Beijing may take steps to foster growth.
Li was quoted in the state-owned China Securities Journal as saying that though the economy faces considerable headwinds and uncertainty, China should allow market forces to do their work.
"If there in an over-reliance on government-led and policy driven measures to stimulate growth, not only is this unsustainable, it would even create new problems and risks," Li was quoted by the paper as saying indirectly.
His remarks were made at a meeting of the state council, or China's cabinet, on Monday after a series of data showed a recovery in the world's No. 2 economy faltered in April.
This Reuters story, filed from Beijing, was posted on their website in the wee hours of Wednesday morning EDT...and it's a little something I found in yesterday's edition of the King Report. It's definitely worth reading.
Japan’s economy has roared back to life as the radical reflation policies of premier Shinzo Abe drive a surge of consumer spending, but fears are growing that the tumbling yen could set off a broader Asian crisis.
Growth jumped to a 3.5pc rate in the first quarter, vindicating the government’s efforts to break Japan’s deflation psychology and lift the country out of its 20-year ice age. “Abe’s kick start appears to have succeeded,” said Flemming Nielsen from Danske Bank.
Retail sales are soaring as a “wealth shock” electrifies the economy. The Nikkei index has risen has 70pc since November, with foreign hedge funds among the first to jump on the bandwagon.
The weaker yen is already delivering a powerful punch, accounting for almost half the growth. The currency has dropped 30pc against the dollar and China’s yuan since August, and 37pc against the euro.
This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site early yesterday evening BST...and I thank Manitoba reader Ulrike Marx for sharing it with us.
The first interview is with Rick Rule...and it's headlined "This Is What I am Doing With My Own Money Right Now". Next is this commentary by Keith Barron. It's entitled "Premiums Soaring as Massive Run on Gold and Silver Continues". And last is this interview with Citi analyst Tom Fitzpatrick...and it bears the title "Five Incredibly Important Gold and U.S. Dollar Charts".
The seizure of funds of the largest bitcoin exchange, Mt. Gox, was triggered by an alleged failure of the company to comply with U.S. financial regulations, according to a federal court document.
The U.S. District Court in Maryland on Tuesday ordered the seizure of Mt. Gox's funds, which were in an account with Dwolla, a payments company that transferred money from U.S. citizens to Mt. Gox for buying and selling the virtual currency bitcoin.
A copy of the seizure order was provided on Wednesday by a spokeswoman for the U.S. Immigration and Customs Enforcement (ICE), the investigative arm of the Department of Homeland Security.
This article was posted on the pcworld.com Internet site on Wednesday...and I found it in a GATA release yesterday.
Billionaire investor George Soros joined Northern Trust Corp. and BlackRock Inc. in cutting holdings of exchange-traded products backed by gold before a bear market in prices last month, while John Paulson maintained a stake that lost about $165 million in the first quarter.
Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest such fund, by 12 percent to 530,900 shares as of March 31, compared with three months earlier, a Securities and Exchange Commission filing showed yesterday. Funds run by Northern Trust and BlackRock showed reductions of more than half, according to earlier filings. Paulson & Co., the largest investor in SPDR, held 21.8 million shares, while Schroder Investment Management Group bought 2.1 million.
This Bloomberg story was posted on their website early yesterday afternoon MDT...and it's courtesy of reader Ken Hurt.
In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.
This stunning move by one of the world’s top performing hedge funds, suggests a powerful surge ahead for gold equities. It should be noted, that in the forty years prior to 2010, the Soros Fund averaged a 20% annual rate of return.
This very short posting over at the bullmarketthinking.com Internet site yesterday, is definitely worth reading...and I thank Phil Barlett for pointing it out.
A new report from the World Gold Council shows that central banks bout 109 tonnes of gold in the first quarter.
This was the seventh straight quarter in which they purchased over 100 tonnes of gold.
Central banks held 31,735.4 tonnes of gold as of May 2013. This was up from 31,694.8 tonnes as of April 2013.
According to the WGC, Russia and South Korea were among the biggest buyers of gold.
This businessinsider.com story from yesterday was posted on their Internet site late yesterday morning...and I thank Roy Stephens for sharing it with us.
The US is moving to broaden its 'blockade' efforts of Iran to the movement of pure gold into the Islamic Republic. The US-led embargo of Iranian crude succeeded in slowing the flow of petrodollars into the nation but as Foreign Affairs committee chairman Edward Cohen remarked, there is "no question that there is gold going from Turkey to Iran."
While the official line from US elite such as Bernanke remains that 'gold is not money' it appears that increasingly other nations would disagree, as Cohen admitted, "in large measure what we're seeing is private Iranian citizens buying gold as a protection against the falling value of Iran's currency."
It would seem somewhat self-evident that the US is admitting, by attempting to embargo this gold flow, that outside the US, the Dollar is becoming increasingly irrelevant (see China's gold demand); and that for many countries the petrodollar no longer exists, having been replaced by 'Petrogold'.
This Zero Hedge posting from yesterday was sent to me by Marshall Angeles...and it's worth reading.
China's demand for gold jumped 20% to 294 tonnes in the first quarter of 2013, while global gold demand overall slid 13% thanks to the dramatic rotation of demand from paper to physical. Chinese demand in gold bars and coins grew to 109.5 tonnes - more than double the five-year quarterly average of 43.8 tonnes.
Central banks added 109.2 tonnes of gold to their reserves in Q1 2013, the ninth consecutive quarter of net purchases. But it was the Q1 ETF outflows of 176.9 tonnes, equating to a 7% decline in total gold ETF holdings that obscured the strong rise in investment for gold bars and coins at the retail level. In the face of the huge 'paper' gold ETF outflows, 'physical' gold demand surged to its highest in 18 months...
The charts are incredible...and this Zero Hedge story is a must read...and it's the second story in a row from Marshall Angeles.
The World Gold Council would more properly be called the World Paper Council, Jeff Nielson of Bullion Bulls Canada writes today, since the council facilitates ownership of paper promises of gold rather than ownership of gold itself. In doing so, Nielson says, the council is just a tool of major banks. His commentary is headlined "The World Paper Council" and it's posted at the Bullion Bulls Canada Internet site.
Jeff has it exactly right, of course. As Chris Powell has said on many occasions over the years...the real reason that the World Gold Council exists in its present form, is to ensure that a real World Gold Council never comes to be. I found this story posted on the gata.org Internet site yesterday...and it's worth reading.
Today’s gold market is being defined by two trends: aggressive selling by investors in North America through exchange-traded funds, and aggressive buying by consumers in Asia.
“When the hedge funds and other investment funds turn negative, it just overwhelms the physical demand,” said George Topping, an analyst at Stifel Nicolaus.
Given that April was the most volatile month for gold since 2008, investment demand could wind up being even worse in the current quarter.
The ETF sell-off masked the fact that underlying physical gold demand has been strong. And in the case of China and India, it has been remarkably strong.
This news item showed up on Canada's financialpost.com Internet site late yesterday afternoon...and I thank Roy Stephens for his final offering in today's column.
Gold consumption reflected a strong revival over last year as Indian households flocked retail outlets to purchase gold jewellery owing to a fall in price of the yellow metal. As against a decline of 13% in global demand for gold, India reported a 27% increase in Q1 2013, surpassing China's demand growth of 20%.
While demand for jewellery increased by 15% to 159.5 tonnes as compared to Q1 2012, investment demand witnessed a significant rise of 52% at 97 tonnes in the January to March period this year, said a recent report released by the World Gold Council (WGC). The government on Thursday also slashed the import tariff value of gold to $466 per 10 grams from $472 per 10 grams.
"Demand growth was largely driven by rural households whose incomes benefited from a good late harvest," the report said. A 4% decline in local gold prices over the quarter further prompted jewellery purchase during the wedding season. Gold prices fell by Rs 500 to a one-month low of Rs 26,800 per 10 grams in the capital on Thursday. While domestic prices fell by over 3% during Q1, in April alone, gold prices fell by nearly 18% due to global factors.
This story showed up on The Times of India website early Friday morning IST...and it's definitely worth reading. I thank Ulrike Marx for digging this story up for us.
Market analyst John Rubino remarks on the futility of technical analysis in a manipulated market like gold.
Rubino writes: "When big players with regulatory immunity can move an asset's price -- and can see resistance/support levels and moving averages just as clearly as anyone else -- smaller traders don't stand a chance."
"Fundamentals always win eventually," he adds, and maybe they do, but the question lately on the minds of gold investors may be whether fundamentals always win within the course of a normal human lifespan. As long as many gold investors -- including some very big ones -- buy paper gold, which can be created to infinity, instead of real metal; as long as the gold mining industry is so oblivious to the rigging of the price of its product and does nothing to defend itself; and as long as mainstream financial news organizations have no interest in committing actual journalism, central banks won't have to worry about any threat to their totalitarian power.
Those are the variables on which GATA continues to work.
Rubino's commentary is headlined "The Golden Bull's Eye" and it's posted at the 24hGold.com Internet site.
No surprises here, dear reader, as I've been saying this for years...and Chris Powell's opening preamble above is definitely worth reading more than once. As you have probably already figured out, I found this very short must read essay in a GATA release yesterday.
Amsterdam...March 1637 (Ruyters): The latest Dutch tulip harvest is in, and experts confidently predict another bumper year for tulip growers and tulip investors alike. Billionaire hedge farmer Jon Paulsen is rumoured to have added hyacinths to his multi-strategy offering and has just launched a fund denominated in daffodils. Tulip stocks climbed by a few millimetres, as they are prone to every day if they grow at their normal organic rate; Couleren bulbs rallied another 2 guilders in heavy Antwerp trading; Rosen and Violetten bulbs ended the trading session more or less unchanged, albeit a bit squashed, and at record highs. The market has been further buoyed in recent weeks by a tide of manure issued by the leading tulip advocate Pol Kruygman from his op-ed column in the New Amsterdam Times, ‘Witterings of a Tulip Fanatic’. Kruygman promised to keep the manure coming, whether anybody wanted it or not.
The popularity and rising value of this colourful perennial plant evidently know no bounds and this is surely a golden age that is never likely to end. Future generations will evidently marvel at the effortless wealth on offer to investors committing their capital unreservedly to tulips today. Dutch housewives bedecked in tulip hats, tulip scarves, tulip dresses and tulip shoes danced gaily in the streets of Tuliptown (formerly Amsterdam) whilst smoking tulip cigarettes, slurping tulip soup, and drinking tulip beer from tulip beer glasses with tulip straws. Given that the anthocyanin Tulipanin is toxic to horses, cats and dogs, the inhabitants of Amsterdam have long since stopped rearing horses, cats and dogs; they have chosen to rear tulips as pets instead.
Many Dutch households have also abandoned the traditional export trades in herring, gin and cheese in order to concentrate their energies where the action is: tulips.
That just about sums up the state of economic, financial and monetary affairs of the entire world today. Just add 376 years. This excellent 3-page commentary is from PFP Wealth Management in the U.K...and certainly falls into the must read category...and I thank London, U.K. reader Jonathan Lavy for today's first 'story'.
The Dow Jones Industrial average closed Tuesday at a new all-time high with a triple-digit surge of 123 points.
And it’s fitting that the Dow hit a new high of 15,215 on a Tuesday because it’s the 18th straight Tuesday that the industrials have finished the day higher than where they began. This 18 for 18 streak started all the way back on January 15. The Dow since then is up more than 1700 points. And according to the statistical gurus at Bespoke Investment Group over 1400 of the 1700 plus points gained since then on the Dow have come on, you guessed it, Tuesday. That’s 83 percent of all the gains in stocks since then coming on this one day of the week.
This story was posted on the abcnews.com Internet site shortly after the markets closed on Tuesday...and I found it in yesterday's edition of the King Report.
President Obama announced Wednesday night that the acting commissioner of the Internal Revenue Service had been ousted after disclosures that the agency gave special scrutiny to conservative groups. Attorney General Eric H. Holder Jr., meanwhile, warned top I.R.S. officials that a Justice Department inquiry would examine any false statements to see if they constituted a crime.
Speaking in the White House’s formal East Room, Mr. Obama said Treasury Secretary Jacob J. Lew had asked for and accepted the resignation of the acting commissioner, Steven Miller, who as deputy commissioner was aware of the agency’s efforts to demand more information from conservative groups seeking tax-exempt status in early 2012.
“Americans have a right to be angry about it, and I’m angry about it,” Mr. Obama said. “It should not matter what political stripe you’re from. The fact of the matter is the I.R.S. has to operate with absolute integrity.”
Integrity? What would the president know about that? Just asking. Well, they didn't waste any time picking a fall guy. One wonders what else will develop going forward. This story was posted on The New York Times website last night...and I thank Roy Stephens for his first offering of the day.
Elizabeth Warren is one of the few Senators out there pushing to understand why the federal government has created an untouchable class of criminals in America that can do whatever they want whenever they want and, not only get away with it, but also get bailed out when they make mistakes. Now she has written a letter to Ben Bernanke, Eric Holder and Mary Jo White. My favorite line is: “If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.”
This Zero Hedge piece is short...as is the Elizabeth Warren letter...and I thank Marshall Angeles for sharing it with us.
The economics world has been having a lot of fun with hedge fund managers.
After several such managers at a recent conference denounced the aggressive money-printing policies of Ben S. Bernanke, the Federal Reserve chairman, the economic blogosphere rose up to mock them.
Many hedge fund managers have been predicting that high inflation and fleeing creditors would send interest rates skyrocketing. Stanley Druckenmiller, Paul Singer, J. Kyle Bass and David Einhorn — all big names in the investing world — have warned against the supposedly runaway central banker. Mr. Druckenmiller said that Mr. Bernanke was “running the most inappropriate monetary policy in history.”
This essay appeared on The New York Times website during the New York lunch hour yesterday...and I thank Phil Barlett for sending it.
The Treasury Department on Friday will suspend sales of state and local government Treasury securities until further notice, the first action to avoid hitting the U.S. debt ceiling. The debt ceiling is expected to be reached on May 18, but the Treasury had been expected to take steps like this one in order to keep paying bills. Treasury Secretary Jacob Lew said last week that the U.S. will be able to avoid the debt limit until Labor Day. The Congressional Budget Office said Tuesday that the deadline could be as late as November.
This 1-paragraph story showed up on the marketwatch.com Internet site late yesterday afternoon EDT...and I thank reader "David in California" for bringing it to our attention.
The British Conservative Party has tabled legislation that would guarantee an EU in/out referendum before the end of 2017.
The bill, released on Tuesday (14 May), is expected to be sponsored as a private member's bill by a backbench Conservative MP.
It has the support of Prime Minister David Cameron but will not be tabled as a government bill because of the coalition agreement with the pro-European Liberal Democrats.
The question to appear on the ballot papers is “Do you think that the United Kingdom should remain a member of the European Union?"
This news item, filed from Brussels, was filed on the euobserver.com Internet site yesterday morning Europe time...and I thank Roy Stephens for his second offering in today's column.
Motorists may have paid thousands of pounds too much for their petrol over the last decade, after two of Britain’s biggest companies were raided on suspicion of manipulating oil prices.
MPs and energy experts have raised fears motorists have been “taken for a very expensive ride”, after officials searched the offices of BP and Shell for evidence of price-rigging.
The companies are suspected of distorting the oil price since 2002, meaning drivers have potentially been ripped off for more than 10 years.
European investigators, who raided the London offices of BP and Shell, said the alleged price-rigging could have had a “huge impact” on the cost of oil, including the price of fuel for consumers.
This story was posted on the telegraph.co.uk Internet site late Wednesday evening BST...and it's courtesy of reader "David in California".
José Briá finds it hard to sleep these days. Sometimes when he wakes up in the middle of the night, he drives out to his farmland a few miles from the center of this tiny village just to make sure everything is all right.
He has been robbed three times already this year: Once, chickens were taken. Then, some tools vanished. The last time, eight rabbits disappeared.
The farmers in Albelda have gotten so worried about thieves that they have taken to patrolling their fields at night, their cars bumping along between rows of peach and pear trees. They have found strategic spots that overlook the fertile valley here in northeastern Spain, and from there they peer into the dark, watching for headlights or flashlights, or any signs of intruders.
Such vigilance has helped, they think. But for many, it is a sorry state of affairs. For a long time, many of Spain’s small, isolated farming communities seemed all but immune from the economic crisis. The fields still needed to be plowed and the animals tended. Prices were not that great, but no one was really out of work. Now, however, many of the farmers believe the problem is at their doorstep.
This article was posted on The New York Times website on Tuesday...and it's another story courtesy of Phil Barlett.
The eurozone economy continues to shrink as Germany's economy grew by a meager 0.1 percent in the past three months, while France slid back into recession, according to data from the EU statistics office Eurostat published on Wednesday (15 May).
Shrinking by 0.2 percent in the first three months of 2013, the eurozone economy has now been in recession for the past one and a half years, the longest period since 1995, when Eurostat started collecting the data.
The worst off are Greece - whose economy shrunk by 5.3 percent - and Portugal (-3.9%) compared to the same period last year.
France is also officially back in recession, after its economy shrank by 0.2 percent over the past six months, amid unemployment rates of over 10 percent and low business and consumer confidence.
This news item showed up on the euobserver.com Internet site very late in the afternoon Europe time...and is courtesy of Roy Stephens.
European leaders had hoped to quickly finalize plans for an EU banking union to regulate bank bailouts and provide a roadmap for unwinding insolvent financial institutions. But with the German election looming, Berlin is wary of moving forward. The result could be a lengthy delay.
The pledge was made almost a year ago. European leaders announced in the summer of 2012 that they were working on a plan to break the vicious cycle between the need to prevent banks from collapse and the surge in sovereign debt such efforts caused. In the future, they said, insolvent banks would not be saved by last-second, taxpayer-funded bailouts. Rather, troubled financial institutions would be propped up by a European banking union or they would be unwound in an orderly fashion.
Since then, leaders have been discussing what, exactly, such a banking union should look like. On Tuesday, European Union finance ministers met in Brussels for fresh talks in an attempt to reach agreement on the degree to which bank shareholders, creditors and savers should be involved in bailouts.
This article appeared on the German website spiegel.de yesterday...and it's courtesy of Roy Stephens, of course.
The first one is with Hong Kong hedge fund manager William Kaye...and it's headlined "Gold to Soar as West Enters a Frightening Economic Ice Age". Next is John Embry. It's entitled "This Catastrophic Situation is Entering the Terminal Phase". The third interview is with Dan Norcini...and it's titled "Incredibly Important Developments in Many Key Markets".
Positions held by Commodity Futures Trading Commission Chairman Gary Gensler and CFTC Commissioner Bart Chilton are up for renewal, but so far neither official has had their position renewed, which suggests new blood may come into the agency, said an futures industry official on Wednesday.
In addition to Gensler’s and Chilton’s positions being up for renewal, CFTC Commissioner Jill Sommers is leaving soon, said Walter Lukken, chairman of the Futures Industry Association on Wednesday in Chicago. Sommers has said in interviews she would not leave until the last set of Dodd-Frank financial regulatory rules are in place.
“We may be faced with a set of new commissioners who will oversee a complex set of rules,” Lukken said, regarding the implementation of the Dodd-Frank rules. Lukken spoke to members of the futures industry at a luncheon to discuss the view from Washington.
No loss as far as I'm concerned. If they did have good intentions at the beginning, they just didn't have the gonads to do what was right...or someone told them to toe the line, or else. They, like the organization they work for, are controlled by the CME Group and JPMorgan. This article appeared on the kitco.com Internet site yesterday...and I thank reader "Rocky R" for sending it along.
Europe, says James Turk, founder and chairman of GoldMoney, is in the midst of two crises—one in the banking sector, the other related to economic activity, and capital is needed to solve both. As to the allegedly strong dollar, Turk, in this interview with The Gold Report, suggests comparing it to the price of gold rather than other fiat currencies for a better picture. And the world's newest currency—Bitcoin—has a lot in common with one of the oldest—gold.
This interview with James was posted on theaureport.com Internet site yesterday.
A two-day wildcat strike at Lonmin's South African platinum mines ended on Thursday, but a union official said workers might walk out at larger rival Anglo American Platinum (Amplats) to protest company plans to axe thousands of jobs.
Lonmin shares jumped more than 3 percent after the world's third-largest platinum producer said 86 percent of its workers had reported for duty, easing fears of prolonged unrest at the mine, the epicentre of months of industry turmoil last year that hit growth in Africa's largest economy.
This Reuters story was posted on the mineweb.com Internet site in the wee hours of this morning.
Gold premiums in India, the world's biggest buyer, more than doubled on speculation that government restrictions on bullion imports by banks to rein in a record current-account deficit would reduce supplies.
The fees jewelers pay dealers for bars jumped as high as $40 an ounce today from $17 to $18 yesterday, Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation, said by phone from Kolkata. The Reserve Bank of India on May 13 limited imports by banks on a consignment basis to only those required to meet the genuine needs of exporters.
The biggest slump in prices in three decades last month led to shoppers crowding retail outlets across India to buy jewelry and coins, deepening concern that the nation's current-account deficit, the broadest measure of trade, would widen from an all-time high. The rush to buy bullion caused a shortage of physical supplies, prompting importers to charge a hefty premium over London prices, according to Bamalwa.
This Bloomberg news item, filed from Mumbai, was posted on their Internet site in the wee hours of yesterday morning Mountain Daylight Time...and I found it a GATA release.
New images of a possible lost city hidden by Honduran rain forests show what might be the building foundations and mounds of Ciudad Blanca, a never-confirmed legendary metropolis.
Archaeologists and filmmakers Steven Elkins and Bill Benenson announced last year that they had discovered possible ruins in Honduras' Mosquitia region using lidar, or light detection and ranging. Essentially, slow-flying planes send constant laser pulses toward the ground as they pass over the rain forest, imaging the topography below the thick forest canopy.
What the archaeologists found and what the new images reveal are features that could be ancient ruins, including canals, roads, building foundations and terraced agricultural land. The University of Houston archaeologists who led the expedition will reveal their new images and discuss them Wednesday at the American Geophysical Union Meeting of the Americas in Cancun.
This interesting item was posted on the foxnews.com Internet site yesterday...and I thank Marshall Angeles for bringing it to my attention...and now to yours.
To commemorate its 40th anniversary last month, Charles Schwab Corp. created an interactive exhibit that is traveling to its major employment centers, including San Francisco, its headquarters and home to 2,300 of its 14,000 workers.
Here's part of the Q&A that appeared in the article...
Q: How do you feel about the robo-traders who have come to dominate stock trading?
A: They add nothing to the marketplace. They are scalpers. In times of crisis they suck out liquidity. They would argue they add liquidity. I don't think so.
Q: What should be done?
A: If I was czar, you would have the real marketplace here and let them go there and play in their dark pools like it's a video game or a lottery. There is no leadership in the SEC to do that. There is no leadership in government to do that. So consequently we have these unbridled frontiers.
This very interesting 2-page story was posted on the San Francisco Chronicle website early on Monday evening...and I found it tucked away in a GATA release yesterday.
High-frequency trading firms increased their campaign contributions to federal lawmakers by 673 percent from the 2008 to the 2012 election cycle, according to a report that sheds light on their political connections in Washington and efforts to impact policymaking.
The report by the Washington-based nonprofit watchdog Citizens for Responsibility and Ethics in Washington (CREW) comes as U.S. financial market regulators mull whether new rules should be adopted to rein in high-speed traders, whom some critics accuse of harming smaller investors.
This Reuters story, filed from Washington, was posted on their website early Monday afternoon...and I found it in yesterday's edition of the King Report. It's definitely worth reading.
Attorney General Eric Holder said on Tuesday that he recused himself from a case involving a Department of Justice decision to subpoena phone records from Associated Press reporters and editors.
Holder also said that the Justice Department has ordered a criminal investigation into the IRS' targeting of different conservative groups applying for tax-exempt status. Holder called it "outrageous and unacceptable." He said the Justice Department and FBI were coordinating to determine if any laws were broken.
On the AP phone probe, Holder said that the leak being investigated was one of the "top two or three" leaks he has ever seen, claiming it put the American people at risk.
Well, he's talking the talk...now let's see if he actually walks the walk. This businessinsider.com news item was posted on their website early yesterday afternoon...and I thank Roy Stephens for sending it our way.
This 6:21 youtube.com video clip is "X" rated for language...however, all the naughty bits have been bleeped out...but I'm sure you're quite good at reading lips by now. It's definitely worth watching...and if you're interested, I'd watch it right away before it gets pulled for copyright reasons. Watch it to the very end. Roy Stephens was kind enough to send it our way.
The impact of the Marketplace Fairness Act (the so-called Internet Sales Tax Bill) which passed the Senate on May 6 received limited coverage in a May 10 Numismaster column. However, it deserves a much more detailed discussion. The negative effect it will have on numismatic and precious metals transactions will be dwarfed by the potentially disastrous economic fallout throughout the U.S. economy.
As former Congressman Jimmy Hayes explained at the American Numismatic Association’s National Money Show in New Orleans last week, the label of “Internet Sales Tax” is completely inaccurate. The bill applies to all forms of remote selling, including by mail, telephone, television, radio and Internet. Nowhere in the bill does the word “Internet” appear.
Here are some of the potential financial pitfalls that lurk if the bill is enacted: The bill enables every jurisdiction that charges sales tax to audit sellers. That includes 45 states, the District of Columbia, 740 American Indian tribes, and thousands of local governments across the country. Maybe a business can absorb the costs of an audit by one or two governments, but what if 20 entities came to audit? Although these audits would be conducted by the state government where the seller lives, the overhead costs of audits could put some smaller sellers out of business.
This essay was posted on the numismaster.com Internet site. West Virginia reader Elliot Simon, who sent me this article and has some expertise in this matter, says it's a must read for all Americans...so, being Canadian, who am I to argue.
Europe's ongoing economic crisis and lasting currency woes are beginning to rapidly erode faith among Europeans in the EU project. That is the result of a new survey undertaken by the renowned Pew Research Center in Washington D.C. and released on Monday evening.
The institute polled 8,000 people in eight European Union member states in March and arrived at some disturbing results. In just one year, the share of Europeans who view the European Union project favorably plummeted from 60 percent in 2012 to just 45 percent this year. Furthermore, only in Germany does a majority continue to support granting more power to Brussels in an effort to combat the ongoing crisis.
"The European Union is the new sick man of Europe," read the survey's opening lines. "The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe."
This spiegel.de story, filed from Washington yesterday, is worth reading as well...and my thanks go out to Roy Stephens for his third contribution to today's column.
German Chancellor Angela Merkel wanted to ignore the Alternative for Germany. But with the anti-euro party gaining ground, many among her conservatives say it is time to change strategy. They are concerned that the currency heretics could cost Merkel her re-election.
Germany's center-right has long been in a luxurious position. Whereas conservatives across Europe have been struggling in recent years with the rise of right-wing populist parties eating into their base, Chancellor Angela Merkel's Christian Democrats have had little to worry about. Though the German left is splintered among three, or even four, parties, the right is a monolith. There is the CDU, its Bavarian wing known as the Christian Social Union, and its favorite coalition partner, the Free Democrats (FDP).
But this election year is different. With the birth of the anti-euro party Alternative for Germany (AfD), Merkel is facing competition from within her own clientele. Furthermore, though her preferred strategy has been that of maintaining complete silence about the AfD so as not to lend it credibility, there are many in Merkel's party who disagree with that approach. And they are increasingly giving voice to their displeasure.
This is another story from the German website spiegel.de. This one was posted on their website mid-afternoon Europe time...and it's another offering from Roy Stephens.
Luxembourg, one of the EU's smallest but richest countries, has said No to a new law against tax evasion.
Its finance minister, Luc Frieden, told press in Brussels on Monday (13 May): "We won't agree tomorrow to the savings tax directive with an extended use because there's still some need for clarification."
He added: "At the moment we lack precision about a number of questions that need answers … We don't know how this will be written into European law and we're not sure that all the loopholes have been closed, in particular a number of trusts don't seem to be covered."
It also contains a big hole on Austria and Luxembourg.
The two financial centres are exempt from automatic exchange until such time as five non-EU tax havens - Andorra, Liechtenstein, Monaco, San Marino and Switzerland - agree to it as well.
Luxembourg, home to just half a million people, has a GDP per capita which is almost three times the size of the EU average. Its wealth comes mainly from financial services. Its banking sector is worth 22 times the size of its economy.
And you though Cyprus was bad. Luxembourg is far worse. No wonder they're opposed to this new tax. This must read story, filed from Brussels, was posted on the euobserver.com Internet site early yesterday morning Europe time...and my thanks go out to Roy Stephens once again.
The E.U. on Monday (13 May) said many Cypriot banks do not know who their customers really are, but wired Nicosia €2 billion anyway.
Commenting on a recent study on money laundering in the Mediterranean island, eurozone finance ministers said in a joint communiqué that it must do better on "customer due diligence by banks" and must fix "the functioning of [its] company registry."
Dutch finance chief Jeroen Dijsselbloem, who chairs the ministers' meetings, added: "This report shows that while the legal [anti-money-laundering] framework is OK, the implementation is really lacking."
This is another story from the euobserver.com Internet site. This one was filed minutes after midnight Europe time yesterday. It's definitely worth the read...and my thanks to Roy Stephens for his final offering in today's column.
This CNBC Asia video clip with Jim runs for 4:49 minutes...and was conducted on Monday evening in North America...Tuesday morning in Hong Kong. It's definitely worth watching...and I thank reader Harold Jacobsen for sharing it with us.
1. Ron Rosen: "This Key Chart Tells You All You Need to Know About Gold". 2. Egon von Greyerz: "The Move to Global Hyperinflation is Now Accelerating". 3. Richard Russell: "We Are Witnessing Unprecedented Events". 4. William Kaye: "How a Criminal Syndicate of Banks is Raping the Gold Market". 5. William Kaye audio interview Part One...and Part Two. 6. James Turk audio interview. 7. Andrew Maguire audio interview.
Today’s Sprott’s Thoughts relate comments made by Sprott USA Chairman Rick Rule in the May 2013 issue of Bonner & Partner’s Family Office Strategic Review .
“Natural resource speculators know that past uranium bull markets offered some ’explosive’ (pun intended) upside. I have been fortunate enough to experience two uranium bull markets: the 1970s bull market, which saw a tenfold increase in the uranium price and a hundredfold increase in some uranium equities, and the bull market of the last decade, which saw a repeat of the earlier performance. If past is prologue, the stage may be set for a third uranium bull run.
“Conditions have changed so completely since the 1970s that a thorough examination of that market teaches us little that is relevant today. But one thing about the 1970s bull market is instructive -the market collapse was partially caused by two catastrophic plant failures: at Chernobyl and Three Mile Island.
The bull market of the 2000s, he says, gives fodder to the case for higher uranium, because the bear market that preceded it is similar to conditions we experience today.
This commentary was posted on the sprottgroup.com Internet site yesterday...and it's worth your time, if you have some.
The Indian consumer — that’s us — is currently public enemy No. 1. We are apparently responsible for leaving the nation’s balance sheet in a shambles with our insatiable lust for gold.
If [the] government and the Reserve Bank of India (RBI) had their way, anyone spotted buying gold would be flayed. Luckily, we are still not that sort of country.
But both are doing everything possible to punish us. We can’t wear our own jewellery above Rs 1 lakh on an overseas holiday. We can’t buy coins easily. The paperwork at a jewellery store is designed to turn away everyone except the most determined. The higher customs duty intends to make gold prohibitively expensive.
Plus, jewellers are being bludgeoned out of business. They can’t import gold. Gold will be rationed through government-owned banks, which will cater only to “genuine” demand. And they are being threatened with draconian laws.
This must read commentary was posted in The Economic Times of India early this morning IST...and I thank Mumbai reader Avi Raheja for finding it for us.
Accelerating gold imports contribute to the current account deficit, which analysts say is one of the biggest concerns for the Indian economy. The government has tried to curb India's appetite for gold with import duties while the central bank has imposed restrictions on the import of the metal, but buyers don't care. They are actually rushing to buy before the authorities clamp down on gold.
On Monday's Akshaya Trithiya festival, the demand was so high that some jewellers opened their shops at 7 am. People stood in queues for hours to buy coins, bars, and ornaments, hoisting sales to the brisk pace last seen in 2008 when gold prices were half of the current level.
The sudden surge in demand has prompted the World Gold Council to say India's imports this year will exceed earlier estimates of 865-965 tonnes, said the council's managing director, Somasundaram PR.
"Consumers are buying both coins and jewellery. Since coins can be bought on the spot, they are flying off the shelves quickly. Orders for jewellery are being placed which may be delivered at a later date," he said.
This is another story from The Economic Times of India. This one was posted on their website on Tuesday...and I found it in a GATA release.
South African workers of world No. 3 platinum producer Lonmin launched a wildcat strike on Tuesday, halting all of the company's mine operations and reigniting fears of deadly unrest that rocked the industry last year.
The platinum belt towns of Rustenburg and Marikana, which saw a bloody Lonmin strike last year, are a volatile flashpoint of labour strife and tensions are running high with job cuts and wage talks looming.
The share price of Lonmin slid over 6 percent and the rand currency hit 3-week lows, underscoring investor jitters over a potential repeat of the 2012 mines turmoil, which hammered platinum and gold production and triggered credit downgrades for Africa's largest economy.
This Reuters story, filed from Johannesburg yesterday, was posted on the mineweb.com Internet site...and I thank Manitoba reader Ulrike Marx for her first story in today's column. It's worth reading.
Examining U.S. trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?
It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)
The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.
This story was sent to me on Monday by reader Federico Schiavio...and I really didn't know what to make of it. But it spread like wildfire on the Internet yesterday...and this is what James Turk had to say about it...
"The Rand Refinery is one of the largest in the world. South Africa used to mine 1,000 tones per year, all of which was refined at Rand Refinery. South Africa now mines less than 1/3rd of that weight. So there is a lot of unused fabricating capacity at the Rand Refinery. Given that the Swiss refiners are working 24/7 and backlogged, it is not surprising to me that someone would send gold to the Rand Refinery for fabricating, whether Krugerrands, kilobars, tael bars or whatever."
"That exports from JFK are rising is not surprising either. The US economy continues to do poorly, so a lot of old jewellery and stuff is being sold for cash, to help make ends meet. So these growing shipments from JFK is just part of the now well-established trend that gold is being shipped from west to east."
This very interesting essay, with some excellent charts, was posted on the qz.com Internet site yesterday...and I thank reader Federico Schiavio for bringing it to our attention.
The Perth Mint of Australia achieved record breaking sales for gold bullion products in April, as lower precious metals prices spurred a huge leap in demand. Silver bullion sales also jumped to the highest level in six months.
The Perth Mint began publicly reporting its monthly gold and silver bullion sales in March 2012, providing a window of insight into demand for physical precious metals. Sales spikes have occurred in September 2012 to coincide with the release of the new designs and last month to coincide with the decline in metals prices.
For the month of April 2013, sales of gold as coins and minted products reached 111,505.06 troy ounces. This amount was more than double the previous month and up by an astounding 534.43% from the year ago period when 17,575.64 troy ounces were sold.
This article is well worth your time and was posted on the coinupdate.com Internet site yesterday...and I thank Elliot Simon for bringing it to our attention.
Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.
"It is not applicable in Portugal," he told reporters. "What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal."
"If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves," Costa said. The value of Portugal's reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.
This Reuters news item was posted on their website early yesterday morning EDT...and I thank Ulrike Marx for digging it up on our behalf.
Consumers will sell the least used gold in five years after prices tumbled into a bear market, curbing a source of metal that typically accounts for about one in every three ounces of global supply.
Refiners will handle about 1,550 metric tons of old jewelry and other discarded metal this year, 4 percent less than in 2012 and the least since 2008, Toronto-based TD Securities Inc. estimates. The amount is valued now at $71.4 billion, from $84.5 billion at this year’s peak. Recycling more than doubled in the decade through 2011 as prices rose to a record. A majority of the 38 analysts surveyed by Bloomberg last month said gold’s streak of 12 consecutive annual gains is over.
“April was the worst month in memory,” said Arthur Abramov, the owner of Manhattan Buyers Inc., a cash-for-gold operator in New York that saw volumes drop to 300 ounces a month from 500 ounces. “A lot of people were shocked, and a lot of people were standoffish about selling.”
This Bloomberg story, filed from New York, was posted on their website late yesterday morning Mountain Daylight Time...and I thank Ulrike Marx for her third and final offering in today's column.
Whenever the Federal Reserve wants to tweak the dials of the economy -- or pretend that it can -- it turns first to its sock puppet at The Wall Street Journal, John Hilsenrath, and "leaks" a rumor of policy change. They like to do this late on Fridays when financial markets are about to close, so that market players will have a whole weekend to ponder the Fed's actions like medieval viziers reading goat entrails.
Last Friday's puddle of steaming guts was a supposed preview of the Fed's "exit strategy" from its reckless policy of "quantitative easing" or "money" creation (or "liquidity," if you like). In other words, they supposedly intend to stop juicing the financial markets with fake wealth, i.e. capital not accumulated from real productive activity, but just fictively created on computer hard drives. For the past year they have been doing this to the tune of $85 billion a month, "buying" US Treasury bonds and bills and an assortment of miscellaneous securities (mostly trash that can't be pawned off on anyone else) through their so-called "primary dealer" bank cohorts, the too-big-to-fail usual suspects, who "earn" hefty transaction fees in the process of conveying all these pixels from Point A to Point B. These interventions are called Permanent Open Market Operations, or PoMo.
The theory all along has been that this $85 billion a month would seep down to Main Street to provoke spending (increasing the "velocity of money) and therefore "jump start" the economy. The theory has proven itself to be complete horseshit, of course. All it has done is suppress interest rates on bonds, depriving old people of income off their savings by so doing. It also artificially jacked up reckless lending on loans for houses, cars, and college degrees, juiced the share price of stocks, and boosted food prices. Meanwhile, an increasingly former middle class languishes in a purgatory of foreclosure, penury, and desperation. The Fed can't really do anything to help them. It can only burden them with more easy-credit debt, especially their college-age children. But ours is a financialized economy and finance is too abstruse for most ordinary people to understand, so they just muddle along in a fog of dashed hopes and repossession.
Wow! Mr. Kunstler lets it all hang out...no shades of grey at all...and a Matt Taibbi-style 'pithy prose' warning is in effect here. I hate to start out with a must read, but that's what it is...and I thank reader Richard Sypher for today's first story.
“Before the era of computer-dominated trading, it was slightly easier to identify winning advisers in advance, because you could more easily understand and evaluate what they were doing,” says Lawrence G. Tint, chairman of Quantal, a risk-management firm for institutional investors, and former U.S. CEO of Barclays Global Investors. reason why machines are winning is our inability to process lots of financial data, which is getting more complex and voluminous every year.
Terrance Odean, a finance professor at the University of California, Berkeley, has extensively studied the behavior and performance of individual traders. He points out that there used to be another human being on the other side of the trade when an individual bought or sold a stock. “Now it’s a supercomputer you’re competing with,” says Odean.
“Individuals are no longer playing against Grandmasters; they’re playing against Deep Blue,” he says, referring to the famous battle in the 1990s between chess’s Grandmasters and International Business Machines’ supercomputer Deep Blue. Individual investors “will almost certainly lose.”
This commentary by Mark Hulbert was posted on the marketwatch.com Internet site on Friday afternoon EDT...and I thank reader U.D. for sending it along.
The IRS conservative targeting scandal is going from bad to worse.
Following the Friday revelations that despite all prior appeals to the contrary, the IRS did in fact apply political bias and prejudice in targeting conservative groups who had applied for exempt status (and who knows what other prejudice when targeting non-liberals entities - perhaps it is time to do an analysis of what the ratio of conservatives to liberals audited each year is?), culminating with the farcical response by an IRS official during the Friday press meeting...
... this may be just the beginning of a major political scandal which in addition to tangential fallout crushing the alleged "impartiality" of the Obama administration, additionally validates many of the heretofore right-wing "conspiracy theories." And as Zero Hedge has shown time and again, it is not a conspiracy theory if it is a conspiracy fact.
What makes things worse for the IRS, the US Treasury, its then-head Tim Geithner, and of course, Barack Obama, is that according to a draft report prepared by the Treasury Department's inspector general for tax administration, expected to be released this week, and seen by AP, is that senior IRS officials knew agents were targeting tea party groups as early as the spring/summer of 2011, well before the 2012 election as we announced before. What makes matters worse, is that it was not only "low-level" employees as the IRS tried to justify its prejudice on Friday, but high level personnel, among which at least one head of division that oversees tax-exempt organizations, and likely all the way to the very top, that were well aware of the witch hunt.
This news item was posted on the Zero Hedge website on Saturday evening...and it's courtesy of Marshall Angeles.
As reported on Friday, the most recent example of a breach in informational Chinese walls was confirmed at Bloomberg, where it was discovered that reporters have the same degree of client surveillance as workers on the API/terminal side. The reason why this is problematic is that since Bloomberg is a monopolist in the financial terminal industry, with such competitor attempts as Reuters' Eikon being massive failures, virtually every finance professional needs a terminal (even if the rate of sale of such terminals is slowing down as a result of the ongoing financial margin headaches). Which means that Bloomberg journos, an increasingly competitive service to the likes of Dow Jones, Reuters and AP, may have had an unfair advantage when it comes to tracking their "pray" - Bloomberg's own clients.
According to Reuters, such client surveillance may have been what tipped of Bloomberg about Bruno Iksil's behavioral patterns while at JPM: "At JPMorgan, the bank's public relations staffers also fumed to one another last year that reporters called repeatedly to inquire whether Bruno Iskil, the "London Whale" trader who was part of a team that lost more than $6 billion in losses, had left the bank because he had not logged onto his terminal in several days, a source with direct knowledge of these discussions said. JPMorgan did not formally bring the matter to Bloomberg's attention, the source said. Bloomberg said it had no record of a complaint."
And now, following the original Goldman complaint which Bloomberg said ended such informational commingling, it is the turn of the Treasury and the Fed to complain.
Wow...the rot goes right to the core. This is simply unbelievable. You have to know that the whole system is compromised when you see must read articles like this one. This is another posting from Zero Hedge...this one from late Sunday morning...and is the second offering in a row from Marshall Angeles.
And so the final curtain falls on the myth of what was supposed to be, in its own words, the "most transparent administration" in history.
As it turns out, the big Friday story of Bloomberg journalists snooping on clients was just amateur hour compared to what the AP was about to serve. In fact, the Watergate affair may soon appear like a walk in the park compared to the First Amendment shitstorm that is about to be unleashed following the just reported news that the US Department of Justice had "secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news."
First amendment? Freedom of speech and press? Surely not when it comes to the Nobel-peace prize winning President and those who dare to expose his secret ways.
And what's worst, is that the AP breach has all the makings of a spiteful hack driven by personal vengeance against one of America's premier news outlets.
Wow! The rot continues...and these are only the things that we know about. Rest assured, dear reader, that it's probably far worse than this, as one can only imagine the stuff that's going on that we don't know about. This news item is another from Zero Hedge...this one from late yesterday afternoon...and the third article in a row from Marshall Angeles.
A top US financial regulator has launched a broad inquiry into the legitimacy of more than 1 million energy and metals transactions by the biggest traders in commodities markets over the past two years.
The Commodity Futures Trading Commission has issued a "special call" asking Wall Street banks and other traders to provide documents that would prove recent derivatives transactions known as "exchanges of futures for swaps" were legal. Lawyers at the CFTC enforcement division are also scrutinising the trades for possible violations.
"They are looking at a huge amount of trading," an industry lawyer said.
The CFTC push shows how authorities are clamping down on previously unregulated derivatives dealing in markets from commodities to interest rates after the financial crisis. The CFTC this week is set to impose new trading rules for over-the-counter markets, even as the Group of 20 industrial countries seeks to shift more derivatives to electronic platforms.
Another meaningless investigation, as the CFTC's fifth anniversary of the silver price fixing investigation approaches. This article appeared in the Financial Times of London yesterday...and it's posted in the clear in this GATA release.
Legendary investor says stock market is in state of "euphoria," while economy is still in the dumps.
At least one notable investor thinks we may be in bubble trouble again.
Sam Zell on Thursday at the SALT hedge fund conference in Las Vegas said stocks are due for a fall. The legendary real estate investor thinks the market is out of touch with what is really going on in the economy.
"Right now you are buying at an all-time high," says Zell. "And there are times when stocks hit a high, and then go higher, but that's when you have a good economy."
This must read commentary was posted on the finance.fortune.cnn.com Internet site early on Friday morning...and is an article I found in yesterday's edition of the King Report.
President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.
The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA, the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.
A year after seizing YPF, Fernandez is funneling more money into the nation’s energy industry as the government struggles to boost production from the world’s third-biggest shale oil reserves. With Argentina already committed to pumping $2 billion of central bank reserves into a fund for energy investments and the highest borrowing costs in emerging markets keeping it from issuing debt abroad, the government is eyeing the billions of undeclared dollars that Argentines hold to help shore up reserves that have dwindled to a six-year low.
Such a deal...! Why would anyone refuse? This story showed up on the Bloomberg website early Friday morning Mountain Daylight Time...and I thank Marshall Angeles for his last offering in today's column.
The European Commission wants to tighten tax loopholes on savings of EU citizens who hold accounts in member states and in Switzerland, Andorra, San Marino, Monaco and Lichtenstein.
"We are looking for an ambitious approach by member states. In our view, a strong and united approach from the European Union against tax havens is very important," European Commission spokeswoman Emer Traynor, told reporters in Brussels on Monday (13 May).
Current EU legislation under the 2005 savings tax directive aims to tackle cross-border tax evasion through an information exchange system for tax authorities among member states. The system helps authorities identify people that receive a savings income but in a member state where they do not live.
This story, filed from Brussels, was posted on the euobserver.com Internet site late yesterday afternoon Europe time...and I thank Roy Stephens for his second contribution to today's column.
The Catholic Primate of Spain has called for a profound shift in Europe's debt crisis policy to avert social collapse, warning that soaring unemployment in Spain and across southern Europe has become "very dangerous".
"We have to change direction, otherwise this is going to bring down whole political systems," said Braulio Rodriguez, the Archbishop of Toledo.
"It is very dangerous. Unemployment has reached tremendous levels and austerity cuts don't seem to be producing results," he told The Telegraph.
"There is deep unease across the whole society, and it is not just in Spain. We have to give people some hope or this is going to foment conflict and mutual hatred."
Europe's Catholic bishops have been careful not to stray into the political debate or criticise EU economic strategy but the Archbishop said the current course is untenable.
This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site on Sunday afternoon...and I thank Roy Stephens for bringing this article to our attention.
policies driving down the value of its currency, while keeping up pressure on Germany to help lift growth in Europe.
At the end of two days of talks among the Group of 7 finance ministers outside London, other nations appeared to accept — at least for now — Japan’s explanation that its new monetary efforts were meant to stimulate its domestic economy, rather than to drive down the yen on international currency markets.
The chancellor of the Exchequer in Britain, George Osborne, said on Saturday that ministers from the G-7, made up of the United States, Germany, Japan, Britain, Italy, France and Canada, had reaffirmed earlier commitments on exchange rates and agreed to make sure policies are “oriented towards achieving domestic objectives.” Other officials described the talks as in-depth and positive. Last week, the dollar breached the 100-yen mark for the first time in over four years.
This article was posted on The New York Times website on Saturday...and I thank Phil Barlett for bringing it to our attention.
Not much to add here. If there still is any confusion why China is desperately manipulating its economic data, so blatantly in fact that virtually everyone has now noticed, this chart should put all doubt to rest. According to CLSA's Chris Wood using NEA data, China's monthly power consumption (the most accurate proxy for underlying economic strength according to the current premier) growth slowed from 5.5% YoY in Jan-Feb 2013 to 1.9% YoY in March, the slowest growth rate since May 2009.
This Zero Hedge news item was posted on their website late yesterday morning EDT...and my thanks go out to reader 'David in California'.
Outspoken Hong Kong hedge fund manager William Kaye spoke with King World News about disappearing gold inventories, financial destruction and the Fed. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions and who is the founder of Pacific Group, had this to say in Part I of an extraordinary written interview series which will be released today. Part 2 is linked here.
A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern.
That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons...
This commentary by Frank was posted on the usfunds.com Internet site on Friday...and I thank West Virginia reader Elliot Simon for sending it.
Gold and silver market manipulation is a topic of Korelin Economics Report, wherein Al Korelin interviews Sprott Asset Management's John Embry. The interview is 10 minutes long and can be heard at the Segment 3 section of the Korelin Internet site.
I found this interview embedded in a GATA release on Saturday...and it's posted on the kereport.com Internet site.
April's abrupt plunge in the gold price was an operation of the Federal Reserve and major banks to protect the Fed's "quantitative easing" and paper gold shorts that can't deliver the metal they have sold, Pacific Group founder and fund manager William S. Kaye writes in the May market letter of Pacific Group's Greater Asian Hedge Fund.
Kaye, who in January announced his fund's commitment to a major purchase of gold, adds that gold exchange-traded funds are being used to manipulate the gold price and essentially are being looted by the banks that are short the metal. He expects paper gold to default this year and the gold price to be reset upward.
By Pacific Group's kind permission, Kaye's letter is posted at gata.org Internet site on Saturday...and it falls into the absolute must read category. I thank Chris Powell for wordsmithing the preamble.
Mine production won't be doing much to meet gold demand for many years, Mike Kosares of Centennial Precious Metals writes on Saturday. The sudden interruption of Barrick Gold's giant Pascua-Lama mine project on the border of Chile and Argentina is a case in point, Kosares observes. His commentary is headlined "The Hidden Crisis in the Gold Business" and it's posted on the Centennial's Internet site. Once again I thank Chris Powell for writing this paragraph of introduction.
GoldMoney research director Alasdair Macleod writes about how his inquiry to the United Kingdom's Financial Services Authority produced an acknowledgment that the custodianship of the metal nominally held by the gold and silver exchange-traded funds GLD and SLV is not regulated by government.
As a result, Macleod concludes, there is enormous counterparty risk for GLD and SLV investors, in a financial crisis central banks more easily can seize metal held by bullion banks, and the two ETFs should not be considered havens against such a crisis. His commentary is headlined "The Role of GLD and SLV" and it's posted at GoldMoney's Internet site.
A limited edition Sachin Tendulkar gold coins, with the senior cricketer’s face and signature embossed on them, were launched today on the auspicious day of ‘Akshaya Tritiya’.
Valuemart Gold and Jewels launched one lakh Sachin Tendulkar gold coins, each weighing 10 grams, in the senior cricketer’s presence here.
The 24 karat gold coin is priced at Rs 34,000 and will be available on valuemartgold.com and leading jewellery stores across the country. The company had signed up Tendulkar as its brand ambassador for a three-year period in February this year.
Indian cricket star Sachin Tendulkar would be the equivalent of Tiger Woods to golf enthusiasts in the United States. My guess is that they'll sell a lot of these 10 gram coins. This story, filed from Mumbai, was posted on the firstpost.com Internet site on Monday IST...and I thank Mumbai reader Avinash Raheja for sending it along.
India's economic boogeyman, the monthly trade deficit, continues to rear its ugly head, this and every time, driven be the country's insatiable desire for gold which is so powerful, the country took full advantage of the plunge in gold prices, and saw business imports of gold soar by 138% y/y in April, forcing the trade deficit to hit a 3 month high of $17.8 billion as more fiat left the country in return for bringing in more of the "barbarous relic." Gold imports more than doubled on both a Y/Y and sequential basis, with gold accounting for $7.5 billion, or 18% of total imports, compared to $3.1 billion in March.
As long as the price suppression of paper gold prices continues, don't expect any notable changes to both of the above trends.
This Zero Hedge posting from early yesterday morning is courtesy of Phil Barlett...and is definitely worth reading.
Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc., the world’s biggest money manager, said it’s still bullish.
Gold is having its worst start to a year since 1982 after dropping 14 percent and sliding into a bear market in April. Holdings in exchange-traded funds backed by bullion tumbled to the lowest since July 2011 even as central banks print money on an unprecedented scale to boost growth. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month.
This Bloomberg article was posted on their website early yesterday afternoon MDT...and I thank reader Ken Hurt for bringing it to our attention.
Many junior mining investors have run off with their tails between their legs. And who can blame them when even the portfolios of market veterans like Peter Grandich, publisher and editor of The Grandich Letter, have taken a beating? But before you cash in, you might want to read why Grandich still has hope for $2,000/oz gold, and which companies he believes have the mojo to make it through this trough in this interview with The Gold Report.
Rick Rule is the founder and chairman of Sprott Global Resource Investments Ltd. As many readers know, he's one of the most successful resource investors in the world, so our own Jeff Clark interviewed him to get his take on the recent crash in gold. In the process, he found out why Rick thinks the capitulation process may not be over, what catalysts he believes could turn the industry around, and why he's thrilled about this market.
Read on to learn why Rick thinks a lifetime buying opportunity is shaping up in the junior resource sector…
This commentary by Rick was posted in the Monday edition of The Casey Daily Dispatch...and the above introduction was written by Casey Research's Senior Metals Investment Strategist, Louis James.
Top global platinum producer South Africa lost at least 750,000 ounces of output last year to strikes, shaft closures and government-ordered safety stoppages, metals refiner Johnson Matthey said in a report on Monday.
The estimate is higher than other forecasts and highlights the gravity of a wave of illegal strikes, rooted in a union turf war, that hit the sector last year and triggered violence which killed over 50 people.
A government safety drive that saw several mine stoppages early in the year also curtailed output.
This Reuters story, filed from Johannesburg, found a home on the mineweb.com Internet site yesterday...and I thank Manitoba reader Ulrike Marx for bringing it to my attention...and now to yours.
Yesterday, former Assistant U.S. Treasury Secretary Paul Craig Roberts condemned the rigging of the gold and silver markets by the Federal Reserve as emblematic of a gangster state protecting banks at the expense of the public. Roberts' commentary is headlined "Gangster State America" and it's posted at his Internet site. This is a must read for sure...and I found it posted over at the gata.org Internet site.